Second in a Series of Essays by Sheila Kuehl on the 2008 California State Budget: The Budget Originally Proposed by the Governor in January

Schools are also supposed to receive a statutory part of the pie according to Prop 98, although that may be adjusted or “suspended”. Still, there are formulas that must be followed.

As a result, virtually all proposed cuts must come from 55% of the budget. However, since resources, general government and the judiciary comprise such a small percentage of the overall budget, the reality is that most of the cuts must come from 47% of the budget: higher education, corrections and health and human services.

January proposed budget was slash and burn

Because the Governor would not propose any revenue enhancements (read new taxes or fees), the budget was a cold splash in the face for most. Of course, Gov. Schwarzenegger has done this every year, primarily, I think, so that he can restore some of the money in his May revise and have everyone kiss his hand for getting half of the money they lost back. This is akin to receiving your paycheck, having your boss take back half of it and then thanking him for not keeping more when he restores 10%.

Proposed cuts in the January budget

Given a projected shortfall of 14.5 billion (then), the Governor proposed to sell more bonds! Specifically, he proposed selling all the Economic Recovery Bonds, already adopted by the people, which were supposed to be strung out over a number of years. He proposed 10% reductions in the current year (see my previous essay), and an additional 10% cut across the board for 2008-09.

In education: The budget would have suspended the Prop 98 guarantee to the schools once again, reduced school funding by 4.4 billion, leaving 55.6 billion in the school budget, and delayed another 1.3 billion to later months, thus realizing more savings.

In health and human services: Definitely the second lion’s share of the proposed cuts. The proposal would have reduced this area by 2.7 billion dollars, 30% of the overall reduction proposed in the entire budget, including almost 100 million out of Medi-Cal, 118 million from Healthy Families (and increasing co-pays and subscription fees for those who participate, as well as capping dental benefits given to children, a bit short sighted, to say the least), 400 million out of CalWORKS, including no longer providing any support for children whose parents have “timed out” of the system, 168 million from Children’s Services, 109 million in In Home Supportive Services, providing no cost of living increase to CalWORKS recipients (as in past years, the federal government does pay a cost of living increase but the state simply keeps it and does not pass it on to recipients in order to save money), 380 million cut from services to people with developmental disabilities, 2.2 billion cut from Medi-Cal, including further cuts to providers, 150 million cut from what the state pays to counties to administer these programs, reductions in payments to hospitals, domestic violence programs, immunizations, AIDS services providers....well, you get the picture.

In corrections: The Governor proposed, in this January budget, placing non-violent offenders on summary parole, unsupervised, after they had served their term, and early release, up to 20 months early, for other non-violent offenders. The January budget also proposed an additional 14 million to the corrections budget for adult population growth in the prisons and an additional 5.5 million for juveniles, but proposed shifting the housing of juvenile offenders to local government at a savings to the state of 50 million dollars. The budget also allocated almost 190 million dollars to pay for pending lawsuits stemming from conditions in California’s prisons.

In child care: Reductions of almost 200 million, retaining child care programs for CalWORKs, recipients who are working, but giving no increases either for growth or cost of living.

In libraries: Proposed a ten percent across the board reduction for all state library programs.

For higher education: Reneges on agreements with CSU and UC to provide certain levels of funding and cuts about 100 million from the base budgets. Would have reduced the budget of the community colleges by 480 million dollars as part of the total cut to Prop 98.

In resources: The Resources Agency had already been cut by about 4 million dollars in the 07-08 cuts and the Governor’s January budget proposed a 13.3 million further reduction to the parks budget, which would have closed 48 out of the 278 state parks as well as reduced seasonal lifeguards at state beaches by 50%. Cuts were also proposed to the already miniscule resources budgets for the environmental protection agency, fish and game and the conservation corps. Bond monies would have been used for flood protection, water supply enhancement, clean water programs, and coastal protection. Global warming solutions actions did receive new funding.

In state employee compensation: Where current agreements expire, no increases are proposed. Retirement expenses are funded, per agreements, but no money is provided for future expenditures. The state lost its challenge to paying retirement benefits in the courts and actually had to pay an interest penalty. With the rising costs of healthcare, largely out of the state’s control, retirement benefits are budgeted with minimal increases.

In energy: The Governor proposed modest increases in alternative and renewable fuel and vehicle technology programs and building efficiency programs.

In enforcement: The Department of Fair Employment and Housing was to be cut by 10%, Housing and Community Development was to be cut by 250 million, mostly in diminished bond funds.

To the National Guard: The Governor’s January budget proposed a 10% reduction, about 1.5 million, which would have also lost 100,000 in federal funds, which would have meant an aggregate 14.3% reduction.

In transportation: The Governor proposed continuing to spend bond funds from Prop 1B, but reduced general fund monies to CalTrans, which, fortunately, got an infusion of federal monies. The Governor also proposed, as he has in the past, moving mass transit monies to highway expenditures.

Next: the May revision.